Summary
The Eleventh Circuit reviews summary judgment and permanent injunctive relief entered for the Federal Trade Commission against Corpay, Inc. and its CEO, Ronald Clarke, concerning allegedly deceptive advertising and unfair fee practices involving fuel cards. The court affirms summary judgment against Corpay on all five counts and against Clarke on four counts, but vacates summary judgment against Clarke on Count II and remands that claim for further proceedings. The court otherwise affirms the permanent injunction and the remainder of the district court’s judgment.
Topics
Practice areas
Questions Presented
- Whether the district court properly granted summary judgment to the FTC on Corpay's deceptive-advertising claims concerning per-gallon discounts, Fuel Only cards, and no transaction fees.
- Whether Corpay's unauthorized add-on fees, undisclosed fees, and erroneous late fees constituted unfair billing practices and whether its billing statements deceptively represented that customers owed those fees.
- Whether the FTC established Ronald Clarke's personal liability by showing that he had authority to control Corpay's conduct and some knowledge of the unlawful practices.
- Whether the district court exceeded its equitable authority or abused its discretion by requiring Express Informed Consent, unavoidable disclosures, no material terms hidden behind hyperlinks, and separate assent for each fee.
Holdings
- Corpay's per-gallon discount advertisements made material false representations that were likely to mislead reasonable consumers, and summary judgment for the FTC on Count I was proper.
- Corpay's Fuel Only advertisements falsely represented that the cards could be restricted to fuel purchases, and summary judgment for the FTC on Count II was proper as to Corpay.
- Fees charged on a per-transaction or per-gallon basis under the challenged conditions qualified as transaction fees, making Corpay's no-transaction-fees advertisements materially false and deceptive as a matter of law.
- Corpay's unauthorized add-on fees and erroneous late fees were unfair practices because they caused or were likely to cause substantial consumer injury that consumers could not reasonably avoid and that was not outweighed by countervailing benefits. Summary judgment for the FTC on Count V, and consequently Count IV, was proper.
- Clarke was personally liable on Counts I, III, IV, and V because he had authority to control Corpay's practices and some knowledge of the unlawful conduct. The FTC did not establish the absence of a genuine dispute regarding Clarke's knowledge of the Fuel Only advertisements, so summary judgment on Count II against him was improper.
- The district court acted within its equitable authority and did not abuse its discretion by entering a permanent injunction requiring Express Informed Consent, unavoidable disclosures, no material terms hidden behind hyperlinks, and separate assent for each charge.
Key quotations
“A fee called a “transaction fee” that is charged per transaction is a transaction fee.” (48)
“Put simply, the statutory text unambiguously does not require the FTC to make a showing that well-established public policies deem an act “unfair.”” (52)
“When injunctive relief is appropriate, the “injunction must be narrowly tailored to the proven legal violations and restrain no more conduct than reasonably necessary.”” (68)
“The goal is to make sure that customers who want to know about and understand the fees Corpay charges can easily do so, and Corpay can’t deceive them.” (75)
Factual background
Corpay marketed fuel cards to businesses by promising per-gallon savings, Fuel Only purchasing restrictions, and no transaction fees. The record showed that the advertised discounts were substantially restricted or discontinued, Fuel Only cards permitted some nonfuel purchases, and Corpay charged fees that it internally characterized as transaction fees. Corpay also automatically enrolled customers in add-on programs, inadequately disclosed fees, obscured charges in billing materials, and assessed late fees despite timely payments. Ronald Clarke was Corpay's CEO and had authority to control the challenged practices, but the FTC did not identify evidence specifically showing that he had some knowledge of the Fuel Only advertisements.
Procedural history
The FTC filed an enforcement action in the Northern District of Georgia alleging deceptive advertising and unfair and deceptive billing practices under Sections 5 and 13(b) of the FTC Act. The district court granted the FTC summary judgment on all five counts against Corpay and Clarke, denied equitable monetary relief under AMG Capital Management, and entered a permanent injunction against Corpay. After an evidentiary hearing concerning the injunction's scope, the district court imposed Express Informed Consent requirements governing fee disclosures and assent. The Eleventh Circuit affirmed most of the judgment but vacated summary judgment against Clarke on the Fuel Only advertising claim and remanded that claim.
Remand instructions
The case is remanded for further proceedings on Count II as to Ronald Clarke because the FTC did not establish his personal liability for the Fuel Only advertising claim. The permanent injunction against Corpay and the remainder of the district court's judgment remain affirmed.